In 1919, the farmers of North Dakota got fed up with predatory lenders, and successfully lobbied for a credit union style state-run bank for them to use instead. Private sector financial institutions elsewhere in the country would have none of this, and destroyed this initial effort by freezing the North Dakota bank out of access to bonds, and by underwriting a political attack on bank supporter Governor Lynn Frazier, leading to his recall. Frazier was, in fact, the first governor to be successfully removed from office in the United States. The leader of the anti-farmer and anti-labor movement, a member of the Independent Voters Association party, took over the governor’s seat. Frazier was later elected senator.
Although anti-farmer interests managed to get rid of pro-farmer and pro-union Frazier, they didn’t exactly get rid of the bank. It continued to exist, but with an altered mission. Today, the bank is still a state bank. The state uses this bank to hold its funds, instead of using a privately owned bank. Local governments can optionally use it, as can other entities.
A state bank that is not chewed up by Wall Street goons has the potential to help a lot of people and advance important progressive ideals. Therefore, you can expect Republicans, Libertarians, Conservatives, and of course, bankers, to vigorously oppose it.
But Minnesota may well get a state bank. Continue reading Minnesota Could Get A “State Bank” if Rebecca Otto Becomes Governor